What is Terrorist Financing?
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What is Terrorist Financing?
What is terrorist financing? According to the Financial Action Task Force (FATF), terrorist financing is the ‘financing of terrorist acts, and of terrorists and terrorist organizations’. It also includes the facilitation of terrorist acts using other assets or stores of value (such as oil and natural resources, property, legal documents, financial instruments, and so forth). Another indirect method for terrorist financing is to store the value in various non-financial tangible/intangible assets. The United Nations defines terrorism as: “[c]riminal acts intended or calculated to provoke a state of terror in the general public, a group of persons or particular persons for political purposes are in any circumstance unjustifiable, whatever the considerations of a political, philosophical, ideological, racial, ethnic, religious or any other nature that may be invoked to justify them.”
What is terrorist financing? Terrorist attacks cause danger to life, serious injury, loss of property, and build a climate of fear, compromising the safety and security of citizens. The frequency of terrorist attacks has increased and can be undertaken by individuals, in collaboration, and on a large or small scale. The reach of terrorist activity can be assisted by online sources planned at radicalization and home-grown violent extremism, which has culminated in terror attacks involving improvised explosive devices, firearms, knives, and vehicles. There has been a compelling rise in radical ideology in the political arena of many countries including Muslim countries. This shows a threat with regard to their eagerness to execute terrorist attacks. Moreover, extreme nationalistic movements may also speak for a possible threat to lives and the stability of democratic nations. These terrorist groups, which intend to enact terrorist acts, require funding to fulfill their purposes.
How do terrorists get funding? Terrorists and terrorist organizations are dependent on money to sustain themselves and execute terrorist acts. Terrorism funding is acquired from a variety of sources. While terrorists aren’t too bothered with hiding the original source of their funding, they are, however, concerned with hiding its target/use and the reason why the funding was collected. Therefore, they use techniques for terrorism funding that are similar to those used by money launderers to hide their money.
The Importance of Combating Terrorism Funding
What is terrorist financing? How do terrorists get funding? Terrorists need the money not just to buy weapons, but also for their travel, training, and accommodation, in order to plan terrorist attacks and develop as a terrorist group. By disrupting or preventing these terrorism-related financial flows, law enforcement can put an end to terrorism. This would result in further avoidance of future attacks by spoiling their material support, as well as the imprints of their criminal purchases, withdrawals, and other illegal financial transactions, which can also give law enforcement and agencies working with the govt. valuable information for any ongoing investigations.
The reason behind countering terrorist financing is not just because it’s a financial crime, such as money laundering, but also as it is an essential part of the global fight to eradicate further terror threats. While terrorists and their groups continue to grow and raise money with different methods, countries have no option but to make it a priority to understand the risks of terrorist financing and develop policies as a response to them.
How do Terrorists Get Funding?
What is terrorist financing? How do terrorists obtain funding? Terrorist groups need to have the necessary skills to obtain, move, store, and, ultimately, use their finances according to what their aim is. If any harm befalls their organization's long-term financial health, this can majorly impact their operation negatively, slowing its speed, the terror group’s reach, and the strength of its campaign for violence, which is a way to prevent their harmful methods. Thus the financial management of terrorists requires detailed planning and accounting for all of their illegal resources and assets, along with their liabilities.
Funding terrorism sources and methods: An analysis of publicly available financial documents from different terrorist groups shows that financial management practices, like documenting revenue levels/sources, expenditure reporting, accounting, and so forth, are critically important for the functioning of terrorist groups with advanced capabilities, particularly those that are territorially based. Any large terrorist organization cannot do without terrorist financial managers to accumulate their revenue, establish their financial shelters - such as bank accounts, front and holding entities, etc. - and oversee their financial disbursements. Their job is also to include provisioning funds to the group’s leading members or operators and further consider the opportunity to invest in any excess capital.
Terror groups such as ISIL have always actively recruited accountants and other finance professionals, to monitor the activities of financial entities within their territories of control, so that they can better manage revenues and minimize losses. This management function can also exist in smaller terrorist groups, but it may be less formal and would involve a lower number of cell members to exercise multiple organizational roles simultaneously and efficiently.
How do terrorists get funding? Here are some typical sources of financial support for terrorism funding:
(i) donations made directly by individuals and organizations
(ii) using charities or NGOs
(iii) through criminal activity
Direct Donations: Direct donations for financial support can be sourced primarily through legitimate funds, in large or small amounts, which have been donated by individuals, legal entities, NGOs, companies, or, in some cases, even foreign countries. These sources can be in the form of salaries or wages, welfare benefits, personal donations, or profits made by businesses. Any donations from individuals can be from their personal or family’s source of income. They can do this by conducting fundraising appeals in their local communities on a small scale (neighbourhood, place of worship, etc.), or by using broader appeals through the internet, such as on their social media or by using crowdfunding sites. The person donating doesn’t necessarily need to know the ultimate purpose for which their funds have been applied and will be used, in case the funds are traced back to them.
Using Charities and Non-Profit Organizations (NGOs): Most of the charities are legitimate and contribute to doing important work, but FATF has realized that they are still vulnerable to misuse by terrorist groups for purposes related to terrorist financing. Charities, NGOs, and similar appeals, all of which are based on supporting those in need, are a particular attraction for terrorist actors for many reasons. The terrorist financiers will be successful in taking funds from these potential donors who are part of the general public. Indeed, donors have an inherent tendency to assist those who are vulnerable or suffering, along with the fact that many governments encourage the public to donate to charities by allowing taxpayers to deduct the value or a percentage of their donations. If the charities take the money in cash, it’s all the more difficult to trace the funding, their movement, and how the funds are being used. There are some charities that have a global presence and work with access to other groups located near conflict zones where terrorist organizations operate. This makes it easier for terrorists to target these charities, such as Falah-e-Insaniat Foundation (FIF) founded by UN listed terrorist Hafiz Saeed.
Criminal Activity: There are some terrorist organizations that have a separate criminal network to collect the funds. This network includes drug trafficking, fraud, cybercrime, and white-collar crimes, all of which are common illicit activities when it comes to committing terrorist financing. For individuals such as foreign fighters or home-grown violent extremists, the abuse of public assistance or benefit programs, plus the creation of fictitious refunds, are identified typologies. Further on, these criminally-derived proceeds would likely be laundered before they are directed for the purposes of terrorist financing. Terrorist organizations covering larger grounds may seize the state-owned financial assets and natural resources within their territory. Those that are non-cash assets or resources, such as antiquities, crude oil, natural gas, minerals, precious metals, stones, etc., must be monetized through black market sales. These funds will further be used for the terrorist organization’s daily use and activities. The black markets that are considered for selling may operate largely outside of the territories or countries from the terrorist’s location.
Funding Terrorism Sources and Methods
What is terrorist financing? Funding terrorism sources and methods:
Storing
There are various means to store the funds, such as:
- Use of bank or other accounts
- Use of prepaid cards
- Using bulk cash storage
- Selling high-value commodities, such as oil, art/antiquities, precious metals, gemstones, and second-hand vehicles
- Using cryptocurrencies
Moving
There are well-known mechanisms to move around the values:
- Through banking and the financial sector
- Through the remittance sector (licensed Money Service Business (MSB))
- Using informal value transfer systems (hawala) and foreign exchange houses
- Using bulk cash smuggling
- Smuggling of high-valued commodities
- Using cryptocurrency
Using
For the use of terrorism funding, there are many options:
- Within terrorist organizations: for weapons and material, administrative purposes, overheads, media or messaging, recruitment, training, financial support for the family, communications equipment, transportation, bribing, and mission preparation to perform terrorist acts.
- Foreign fighters: for travelling services, passport and visa costs, outdoor equipment, purchasing of weapons, and preparing for combat training
- Lone actors and small terrorist cells: for weapons and material, vehicles, the bare minimum for food and shelter, communication devices, transport, and any procurement requirements for terrorist plots. There’s a chance that many of these expenses are for day-to-day use, which are difficult to identify as being terrorism-related.
Read More: Which countries are present in the FATF Grey Countries List?
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AML Vendors in Australia: How to Choose the Right Partner in 2025
With AUSTRAC raising the bar on compliance, choosing the right AML vendor is no longer just a tech decision — it’s a strategic one.
The financial crime landscape in Australia is evolving at lightning speed. Fraudsters are exploiting the New Payments Platform (NPP), crypto exchanges, and cross-border corridors to launder billions. At the same time, AUSTRAC is demanding more from financial institutions, issuing record fines for compliance failures.
In this environment, financial institutions, fintechs, and remittance providers need more than just software. They need reliable AML vendors who can deliver cutting-edge technology, regulatory alignment, and ongoing support. But with so many options on the market, how do you choose the right one?
This blog explores the role of AML vendors, what to look for in a partner, common pitfalls to avoid, and how leading solutions like Tookitaki’s FinCense are changing the compliance game in Australia.
Why AML Vendors Matter More Than Ever
1. Regulatory Scrutiny
AUSTRAC expects institutions to demonstrate not just compliance frameworks, but effective systems. Vendors that can’t prove effectiveness expose institutions to both regulatory and reputational risk.
2. Real-Time Payment Risks
NPP enables instant fund transfers, which fraudsters use to layer funds rapidly. AML vendors must provide real-time monitoring, not overnight batch processing.
3. Expanding Typologies
From mule networks and shell companies to crypto layering and trade-based laundering, criminal methods are growing more complex. AML vendors must constantly update detection capabilities.
4. Rising Costs of Compliance
AML compliance is among the largest operational expenses for Australian institutions. Vendors who reduce false positives and automate reporting can save millions.
What Do AML Vendors Provide?
At their core, AML vendors deliver technology and expertise to help institutions detect, prevent, and report financial crime. Their solutions typically cover:
- Transaction monitoring (real-time and batch)
- Customer onboarding and CDD/KYC
- Sanctions and PEP screening
- Case management workflows
- Regulatory reporting (SMRs, TTRs, IFTIs)
- AI and machine learning for anomaly detection
- Audit trails and explainability
The best AML vendors also provide local compliance expertise, ongoing updates, and typology intelligence to ensure institutions stay ahead of both regulators and criminals.
Key Qualities of Top AML Vendors
1. AUSTRAC Compliance Alignment
The vendor must fully align with the AML/CTF Act requirements, including suspicious matter reporting and record-keeping.
2. Real-Time Monitoring
Essential for detecting suspicious activity across instant payments, remittance corridors, and cross-border transactions.
3. AI-Powered Detection
Advanced vendors offer machine learning and anomaly detection to reduce false positives and catch unknown patterns.
4. End-to-End Coverage
From onboarding to investigation, vendors should provide a unified platform covering all AML needs.
5. Explainability & Transparency
Glass-box AI and detailed audit trails ensure compliance teams can explain decisions to regulators.
6. Scalability & Flexibility
The solution must work for Tier-1 banks and fast-scaling fintechs alike. Cloud-native platforms are a plus.
7. Ongoing Support
Vendors should offer training, scenario updates, and local compliance support — not just software deployment.
Pitfalls to Avoid When Choosing AML Vendors
- Choosing on Price Alone: Low-cost solutions may lack the intelligence and scalability to meet AUSTRAC standards.
- Overlooking Integration: Systems that don’t integrate smoothly with existing banking cores and case management tools create operational bottlenecks.
- Ignoring Update Frequency: Vendors who don’t regularly update typologies leave institutions exposed to new threats.
- Black-Box AI: Lack of explainability increases regulatory risk.
Questions to Ask Potential AML Vendors
- How do you align with AUSTRAC compliance requirements?
- Do you provide real-time monitoring for NPP transactions?
- How do you reduce false positives compared to traditional systems?
- Can investigators access explainable alerts and audit trails?
- Do you provide ongoing typology updates and training?
- What is your track record in the Australian market?
Top Trends Among AML Vendors in 2025
- Federated Intelligence Sharing: Vendors offering anonymised data sharing across institutions to detect emerging threats.
- Agentic AI Assistants: Vendors embedding AI copilots to guide investigators in real time.
- Simulation Engines: Ability to test new detection rules before live deployment.
- Cross-Channel Risk Visibility: Unified monitoring across banking, payments, trade finance, and crypto.
Spotlight: Tookitaki as a Leading AML Vendor
Tookitaki’s FinCense is positioning itself among the top AML vendors in Australia by offering more than just compliance software:
- Real-Time Monitoring: Detects fraud and laundering across NPP and cross-border corridors.
- Agentic AI: Learns from evolving typologies while keeping false positives low.
- Federated Learning: Insights from the AFC Ecosystem — a global community sharing real-world typologies.
- FinMate AI Copilot: Generates case summaries, recommends actions, and supports faster investigations.
- Audit-Ready Compliance: SMRs, TTRs, and detailed audit trails aligned with AUSTRAC standards.
- End-to-End Platform: Covers onboarding, screening, monitoring, investigations, and reporting.
FinCense isn’t just a tool — it’s a trust layer that helps institutions build resilience, reduce compliance costs, and stay one step ahead of criminals.
Case Study Example: A Regional Australian Bank
A community-owned bank in Australia faced mounting compliance costs and a backlog of false positives. After deploying Tookitaki’s FinCense:
- False positives dropped by 65%
- Investigation speed doubled with FinMate’s summaries
- AUSTRAC audit preparation time reduced from weeks to hours
The result? Lower costs, faster compliance, and stronger customer trust.
Future Outlook for AML Vendors in Australia
- Closer Regulator Collaboration: Vendors working directly with AUSTRAC to ensure local alignment.
- AI-First Compliance: Tools moving beyond rules to AI-powered, predictive monitoring.
- Industry Collaboration: Shared platforms to combat mule networks and cross-border scams.
- Sustainability: Vendors focusing on cost reduction and efficiency as compliance costs rise.
Conclusion: Choose Vendors That Build Trust, Not Just Tools
For Australian financial institutions, choosing the right AML vendor is a decision that goes beyond software. It’s about securing compliance, building trust, and preparing for an increasingly fast and complex financial crime landscape.
Pro tip: Evaluate vendors not just on features, but on their ability to evolve with both AUSTRAC’s expectations and criminal innovation. The right partner will save money, reduce risk, and future-proof your compliance programme.
Fraud Prevention in the Banking Industry: The Australian Perspective
As fraud evolves in speed and sophistication, Australian banks must adopt smarter prevention strategies to protect customers and maintain trust.
Fraud has always been a challenge for banks, but in Australia today, it has become one of the most pressing risks facing the financial sector. With the rise of digital banking, real-time payments through the New Payments Platform (NPP), and cross-border transactions, fraudsters have more opportunities than ever to exploit vulnerabilities.
For banks, preventing fraud is no longer a compliance exercise. It is a business-critical function that directly affects profitability, reputation, and customer trust. This blog takes a closer look at fraud prevention in the banking industry, exploring the risks, regulatory expectations, and the most effective solutions being deployed in Australia.
The Rising Tide of Banking Fraud in Australia
1. The Cost of Fraud to Australians
In 2024, Australians lost more than AUD 3 billion to scams and fraud, according to Scamwatch. A significant portion of these losses flowed through bank accounts, often enabled by authorised push payment (APP) scams and mule networks.
2. Real-Time Payments, Real-Time Risks
The NPP has made everyday banking faster and more convenient, but it has also given fraudsters a new tool. With funds moving instantly, banks have less time to detect suspicious activity, making proactive prevention critical.
3. Sophisticated Criminal Typologies
Fraudsters are no longer lone operators. They work in syndicates, often crossing borders and using advanced tactics such as deepfake impersonations, synthetic identities, and account takeover fraud.
4. Regulatory Scrutiny
AUSTRAC and ASIC have made it clear that banks are expected to have strong fraud prevention frameworks in place. Failing to act not only exposes banks to financial losses but also to regulatory penalties and reputational damage.
Common Types of Banking Fraud in Australia
1. Account Takeover (ATO)
Fraudsters gain control of a customer’s account through phishing, malware, or stolen credentials, then move funds instantly.
2. Authorised Push Payment (APP) Scams
Victims are tricked into authorising payments, often to mule accounts controlled by fraud syndicates.
3. Card Fraud
Both card-present and card-not-present fraud remain prevalent, especially in e-commerce channels.
4. Mule Accounts
Fraudsters use networks of mule accounts to layer and obscure illicit funds. These may be controlled by syndicates or unwitting participants.
5. Insider Fraud
Employees with access to sensitive systems may abuse their position to commit fraud, often in collusion with external actors.
6. Trade and Cross-Border Fraud
International corridors expose Australian banks to risks of trade-based money laundering and fraudulent remittance activity.
Red Flags Banks Must Monitor
- Sudden changes in transaction behaviour, such as rapid high-value transfers.
- Accounts that act as pass-throughs, with funds entering and exiting immediately.
- Multiple accounts linked to the same device or IP address.
- Customers reluctant to provide source-of-funds documentation.
- Transfers to newly created or suspicious beneficiary accounts.
- Unusual login behaviour, such as logins from overseas followed by transactions.
Regulatory Expectations on Fraud Prevention
Australian regulators expect banks to take a proactive, technology-led approach to fraud prevention.
- AUSTRAC: Requires banks to have robust monitoring systems capable of detecting suspicious activity in real time, especially under the AML/CTF Act.
- ASIC: Focuses on consumer protection, particularly in cases of APP scams where customers are tricked into transferring funds.
- Australian Banking Association (ABA): Works with industry participants to develop shared frameworks for fraud detection and scam reimbursement models.
Best Practices for Fraud Prevention in the Banking Industry
1. Real-Time Transaction Monitoring
Banks must monitor every transaction in real time, scoring risk within milliseconds. This is essential for instant payments under the NPP.
2. AI and Machine Learning
AI-driven systems can adapt to new typologies, reduce false positives, and detect anomalies beyond static rules.
3. Behavioural Analytics
Studying how customers interact with banking platforms helps detect account takeover attempts or bot-driven fraud.
4. Strong Customer Authentication (SCA)
Multi-factor authentication, biometrics, and device fingerprinting reduce the likelihood of unauthorised access.
5. Network and Entity Analysis
By linking accounts, devices, and transactions, banks can uncover hidden mule networks.
6. Integrated Case Management
Centralised investigation platforms streamline workflows, enabling faster decisions and regulator-ready reports.
7. Collaboration and Intelligence Sharing
Banks must work together, sharing fraud data and typologies. Collaborative intelligence strengthens the sector’s resilience against syndicates.
Challenges Facing Banks in Fraud Prevention
- Balancing Security and Customer Experience: Overly strict controls may frustrate customers, while lax controls create vulnerabilities.
- Cost of Compliance: Implementing advanced fraud systems is expensive, but far cheaper than paying fines or losing trust.
- Talent Shortages: Skilled fraud investigators and compliance professionals are in short supply in Australia.
- Evolving Criminal Tactics: Fraudsters innovate constantly, forcing banks to remain agile and adaptive.
The Role of Technology in Modern Fraud Prevention
Technology is at the heart of modern fraud prevention strategies. Banks are increasingly turning to advanced solutions that combine AI, machine learning, and federated intelligence.
AI-Powered Detection
Machine learning models reduce false positives and detect new fraud patterns without manual intervention.
Federated Learning
Through networks like the AFC Ecosystem, banks can share anonymised typology data, improving detection across the industry without exposing sensitive customer data.
Agentic AI Assistants
AI copilots can summarise cases, recommend next steps, and assist investigators, saving valuable time.
Simulation Engines
Banks can test fraud scenarios against historical data before deploying detection rules live.
Case Example: Community-Owned Banks Leading the Way
Community-owned banks like Regional Australia Bank and Beyond Bank are adopting advanced fraud and AML solutions to strengthen their defences. By leveraging technology platforms such as Tookitaki’s FinCense, these banks are:
- Detecting mule networks in real time.
- Reducing false positives and investigation workload.
- Staying AUSTRAC-ready with explainable alerts and automated reporting.
- Demonstrating that even mid-sized banks can lead in compliance innovation.
These examples highlight that fraud prevention is not just for Tier-1 banks. Institutions of all sizes can leverage advanced tools to protect their customers and build trust.
Spotlight: Tookitaki’s FinCense for Fraud Prevention
FinCense, Tookitaki’s end-to-end compliance platform, is designed to address the challenges of modern fraud prevention in the banking industry.
- Real-Time Monitoring: Detects fraud instantly across NPP and cross-border transactions.
- Agentic AI: Continuously adapts to new fraud typologies with minimal false positives.
- Federated Intelligence: Accesses real-world scenarios from a global community of compliance experts.
- FinMate AI Copilot: Summarises cases and recommends actions for investigators.
- Regulator-Ready Reporting: AUSTRAC compliance built in, with detailed audit trails.
- Cross-Channel Coverage: Banking transfers, cards, wallets, and crypto monitored from a single platform.
By unifying fraud prevention and AML functions, FinCense reduces operational costs while strengthening resilience against financial crime.
The Future of Fraud Prevention in Australian Banking
Looking ahead, several trends will shape how banks approach fraud prevention:
- Expansion of PayTo: As this NPP feature grows, new fraud typologies will emerge.
- Rise of Deepfake Scams: Voice and video impersonation will challenge traditional controls.
- Shared Fraud Databases: Banks will increasingly collaborate to stop scams mid-flight.
- Cross-Border Intelligence: With Australia connected to Southeast Asia, cross-border monitoring will be vital.
- Sustainability of Compliance: AI and automation will help reduce the cost of compliance while improving outcomes.
Conclusion
Fraud prevention in the banking industry is no longer optional or secondary. In Australia’s real-time, always-on financial environment, it is a strategic imperative. Banks that fail to act face not only financial losses but also reputational damage and regulatory penalties.
The path forward lies in adopting real-time, AI-powered fraud prevention platforms that combine detection, investigation, and compliance in a single ecosystem. Community-owned banks like Regional Australia Bank and Beyond Bank are already proving that with the right technology, any institution can meet the challenges of modern fraud.
Pro tip: Don’t just invest in fraud detection. Invest in fraud prevention solutions that adapt, scale, and build trust with your customers.
Fraud Screening Tools in Australia: Smarter Defences for a Real-Time World
With fraud losses crossing billions, Australian institutions need smarter fraud screening tools to protect both compliance and customer trust.
Fraud is now one of the biggest threats facing Australia’s financial system. Scamwatch data shows Australians lost over AUD 3 billion in 2024 to scams — a figure that continues to rise with digital banking adoption and real-time payment rails like the New Payments Platform (NPP).
Traditional fraud systems, built on static rules, simply can’t keep pace. That’s why financial institutions are turning to fraud screening tools powered by AI and behavioural intelligence to screen transactions, customers, and devices in real time.
But what exactly are fraud screening tools, and how should Australian businesses evaluate them?
What Are Fraud Screening Tools?
Fraud screening tools are systems that automatically review transactions, user activity, and onboarding data to identify and block potentially fraudulent activity. They act as gatekeepers — scoring risk in milliseconds and deciding whether to approve, block, or escalate.
They’re used across industries:
- Banks & Credit Unions: Screening wire transfers, cards, and online banking logins.
- Fintechs: Vetting high volumes of digital onboarding and payment activity.
- Remittance Providers: Screening cross-border corridors for fraud and laundering.
- E-commerce Platforms: Stopping card-not-present fraud and refund abuse.
- Crypto Exchanges: Detecting suspicious wallets and transaction flows.
Why Fraud Screening Tools Are Critical in Australia
1. Instant Payments Raise the Stakes
The NPP enables near-instant transactions. Fraudsters exploit this speed to move funds through mule accounts before detection. Tools must screen transactions in real time, not in batch.
2. Scam Surge in Social Engineering
Romance scams, impersonation fraud, and deepfake-driven attacks are spiking. Many involve “authorised push payments” where victims willingly transfer money. Screening tools must flag unusual transfer behaviour even when the customer approves it.
3. Regulatory Expectations
ASIC and AUSTRAC expect robust fraud and AML screening. Institutions must prove that they have effective, adaptive screening tools — not just compliance checklists.
4. Rising Cost of Compliance
Investigating false positives consumes massive resources. The right screening tools should cut operational costs by reducing unnecessary alerts.
Key Features of Effective Fraud Screening Tools
1. Real-Time Transaction Analysis
- Millisecond-level scoring of payments, logins, and device sessions.
- Monitors velocity (multiple payments in quick succession), device fingerprints, and geo-location mismatches.
2. AI & Machine Learning Models
- Detect anomalies beyond static rule sets.
- Learn continuously from confirmed fraud cases.
- Reduce false positives by distinguishing genuine unusual behaviour from fraud.
3. Behavioural Biometrics
- Analyse how users type, swipe, or navigate apps.
- Identify “bots” and fraudsters impersonating legitimate customers.
4. Multi-Channel Coverage
- Banking transfers, cards, digital wallets, remittances, and crypto — all screened in one platform.
5. Customer & Merchant Screening
- KYC/KYB integration to verify identity documents.
- Sanctions, PEP, and adverse media screening.
6. Explainability & Audit Trails
- “Glass-box” AI ensures every flagged transaction comes with a clear reason code for investigators and regulators.
7. Case Management Integration
- Alerts are fed directly into case management systems, enabling investigators to act quickly.
How Fraud Screening Tools Detect Common Threats
Account Takeover (ATO)
- Detects logins from unusual devices or IPs.
- Flags high-value transfers after suspicious logins.
Mule Networks
- Screens for multiple accounts tied to one device.
- Detects unusual fund flows in and out with little balance retention.
Synthetic Identity Fraud
- Flags inconsistencies across ID documents, IP addresses, and behavioural signals.
Romance & Investment Scams
- Detects repetitive small transfers to new beneficiaries.
- Flags high-value transfers out of pattern with customer history.
Crypto Laundering
- Screens wallet addresses against blacklists and blockchain analytics databases.
Red Flags That Tools Should Catch
- Transactions at unusual hours (e.g., midnight high-value transfers).
- Beneficiary accounts recently opened and linked to multiple small deposits.
- Sudden change in login behaviour (new device, new location).
- Customers reluctant to provide source-of-funds during onboarding.
- Repeated failed logins followed by success and rapid transfers.
Evaluating Fraud Screening Tools: Questions to Ask
- Does the tool support real-time screening across NPP and cross-border payments?
- Is it powered by adaptive AI that learns from new scams?
- Can it reduce false positives significantly?
- Does it integrate with AML systems for holistic compliance?
- Is it AUSTRAC-aligned, with SMR-ready reporting?
- Does the vendor provide local market expertise in Australia?
The Cost of Weak Screening Tools
Without robust fraud screening, institutions face:
- Direct losses from fraud payouts.
- Regulatory fines for inadequate controls.
- Reputational damage — customer trust is hard to regain once lost.
- Operational drain from chasing false positives.
Spotlight: Tookitaki’s FinCense Fraud Screening Tools
FinCense, Tookitaki’s end-to-end compliance platform, is recognised for its advanced fraud screening capabilities.
- Real-Time Monitoring: Screens transactions across banking, payments, and remittances in milliseconds.
- Agentic AI: Detects known and unknown typologies while minimising false positives.
- Federated Intelligence: Draws on real-world fraud scenarios contributed by compliance experts in the AFC Ecosystem.
- FinMate AI Copilot: Provides investigators with instant case summaries and recommended actions.
- Cross-Channel Coverage: Banking, e-wallets, remittance, crypto, and card transactions all covered in one system.
- Regulator-Ready: Transparent AI with complete audit trails to satisfy AUSTRAC.
FinCense doesn’t just screen for fraud — it prevents it in real time, helping Australian institutions build both resilience and trust.
Future Trends in Fraud Screening Tools
- Deepfake & Voice Scam Detection: Identifying manipulated audio and video scams.
- Collaboration Networks: Shared fraud databases across institutions to stop scams mid-flight.
- Agentic AI Assistants: Handling end-to-end fraud investigations with minimal human intervention.
- Cross-Border Intelligence: Coordinated screening across ASEAN corridors, where many scams originate.
Conclusion: Smarter Screening, Stronger Defences
Fraud in Australia is becoming faster, more complex, and more costly. But with the right fraud screening tools, institutions can screen smarter, stop scams in real time, and stay on the right side of AUSTRAC.
Pro tip: Don’t settle for tools that only check boxes. The best fraud screening tools combine real-time detection, adaptive AI, and seamless compliance integration — turning fraud prevention into a competitive advantage.
AML Vendors in Australia: How to Choose the Right Partner in 2025
With AUSTRAC raising the bar on compliance, choosing the right AML vendor is no longer just a tech decision — it’s a strategic one.
The financial crime landscape in Australia is evolving at lightning speed. Fraudsters are exploiting the New Payments Platform (NPP), crypto exchanges, and cross-border corridors to launder billions. At the same time, AUSTRAC is demanding more from financial institutions, issuing record fines for compliance failures.
In this environment, financial institutions, fintechs, and remittance providers need more than just software. They need reliable AML vendors who can deliver cutting-edge technology, regulatory alignment, and ongoing support. But with so many options on the market, how do you choose the right one?
This blog explores the role of AML vendors, what to look for in a partner, common pitfalls to avoid, and how leading solutions like Tookitaki’s FinCense are changing the compliance game in Australia.
Why AML Vendors Matter More Than Ever
1. Regulatory Scrutiny
AUSTRAC expects institutions to demonstrate not just compliance frameworks, but effective systems. Vendors that can’t prove effectiveness expose institutions to both regulatory and reputational risk.
2. Real-Time Payment Risks
NPP enables instant fund transfers, which fraudsters use to layer funds rapidly. AML vendors must provide real-time monitoring, not overnight batch processing.
3. Expanding Typologies
From mule networks and shell companies to crypto layering and trade-based laundering, criminal methods are growing more complex. AML vendors must constantly update detection capabilities.
4. Rising Costs of Compliance
AML compliance is among the largest operational expenses for Australian institutions. Vendors who reduce false positives and automate reporting can save millions.
What Do AML Vendors Provide?
At their core, AML vendors deliver technology and expertise to help institutions detect, prevent, and report financial crime. Their solutions typically cover:
- Transaction monitoring (real-time and batch)
- Customer onboarding and CDD/KYC
- Sanctions and PEP screening
- Case management workflows
- Regulatory reporting (SMRs, TTRs, IFTIs)
- AI and machine learning for anomaly detection
- Audit trails and explainability
The best AML vendors also provide local compliance expertise, ongoing updates, and typology intelligence to ensure institutions stay ahead of both regulators and criminals.
Key Qualities of Top AML Vendors
1. AUSTRAC Compliance Alignment
The vendor must fully align with the AML/CTF Act requirements, including suspicious matter reporting and record-keeping.
2. Real-Time Monitoring
Essential for detecting suspicious activity across instant payments, remittance corridors, and cross-border transactions.
3. AI-Powered Detection
Advanced vendors offer machine learning and anomaly detection to reduce false positives and catch unknown patterns.
4. End-to-End Coverage
From onboarding to investigation, vendors should provide a unified platform covering all AML needs.
5. Explainability & Transparency
Glass-box AI and detailed audit trails ensure compliance teams can explain decisions to regulators.
6. Scalability & Flexibility
The solution must work for Tier-1 banks and fast-scaling fintechs alike. Cloud-native platforms are a plus.
7. Ongoing Support
Vendors should offer training, scenario updates, and local compliance support — not just software deployment.
Pitfalls to Avoid When Choosing AML Vendors
- Choosing on Price Alone: Low-cost solutions may lack the intelligence and scalability to meet AUSTRAC standards.
- Overlooking Integration: Systems that don’t integrate smoothly with existing banking cores and case management tools create operational bottlenecks.
- Ignoring Update Frequency: Vendors who don’t regularly update typologies leave institutions exposed to new threats.
- Black-Box AI: Lack of explainability increases regulatory risk.
Questions to Ask Potential AML Vendors
- How do you align with AUSTRAC compliance requirements?
- Do you provide real-time monitoring for NPP transactions?
- How do you reduce false positives compared to traditional systems?
- Can investigators access explainable alerts and audit trails?
- Do you provide ongoing typology updates and training?
- What is your track record in the Australian market?
Top Trends Among AML Vendors in 2025
- Federated Intelligence Sharing: Vendors offering anonymised data sharing across institutions to detect emerging threats.
- Agentic AI Assistants: Vendors embedding AI copilots to guide investigators in real time.
- Simulation Engines: Ability to test new detection rules before live deployment.
- Cross-Channel Risk Visibility: Unified monitoring across banking, payments, trade finance, and crypto.
Spotlight: Tookitaki as a Leading AML Vendor
Tookitaki’s FinCense is positioning itself among the top AML vendors in Australia by offering more than just compliance software:
- Real-Time Monitoring: Detects fraud and laundering across NPP and cross-border corridors.
- Agentic AI: Learns from evolving typologies while keeping false positives low.
- Federated Learning: Insights from the AFC Ecosystem — a global community sharing real-world typologies.
- FinMate AI Copilot: Generates case summaries, recommends actions, and supports faster investigations.
- Audit-Ready Compliance: SMRs, TTRs, and detailed audit trails aligned with AUSTRAC standards.
- End-to-End Platform: Covers onboarding, screening, monitoring, investigations, and reporting.
FinCense isn’t just a tool — it’s a trust layer that helps institutions build resilience, reduce compliance costs, and stay one step ahead of criminals.
Case Study Example: A Regional Australian Bank
A community-owned bank in Australia faced mounting compliance costs and a backlog of false positives. After deploying Tookitaki’s FinCense:
- False positives dropped by 65%
- Investigation speed doubled with FinMate’s summaries
- AUSTRAC audit preparation time reduced from weeks to hours
The result? Lower costs, faster compliance, and stronger customer trust.
Future Outlook for AML Vendors in Australia
- Closer Regulator Collaboration: Vendors working directly with AUSTRAC to ensure local alignment.
- AI-First Compliance: Tools moving beyond rules to AI-powered, predictive monitoring.
- Industry Collaboration: Shared platforms to combat mule networks and cross-border scams.
- Sustainability: Vendors focusing on cost reduction and efficiency as compliance costs rise.
Conclusion: Choose Vendors That Build Trust, Not Just Tools
For Australian financial institutions, choosing the right AML vendor is a decision that goes beyond software. It’s about securing compliance, building trust, and preparing for an increasingly fast and complex financial crime landscape.
Pro tip: Evaluate vendors not just on features, but on their ability to evolve with both AUSTRAC’s expectations and criminal innovation. The right partner will save money, reduce risk, and future-proof your compliance programme.
Fraud Prevention in the Banking Industry: The Australian Perspective
As fraud evolves in speed and sophistication, Australian banks must adopt smarter prevention strategies to protect customers and maintain trust.
Fraud has always been a challenge for banks, but in Australia today, it has become one of the most pressing risks facing the financial sector. With the rise of digital banking, real-time payments through the New Payments Platform (NPP), and cross-border transactions, fraudsters have more opportunities than ever to exploit vulnerabilities.
For banks, preventing fraud is no longer a compliance exercise. It is a business-critical function that directly affects profitability, reputation, and customer trust. This blog takes a closer look at fraud prevention in the banking industry, exploring the risks, regulatory expectations, and the most effective solutions being deployed in Australia.
The Rising Tide of Banking Fraud in Australia
1. The Cost of Fraud to Australians
In 2024, Australians lost more than AUD 3 billion to scams and fraud, according to Scamwatch. A significant portion of these losses flowed through bank accounts, often enabled by authorised push payment (APP) scams and mule networks.
2. Real-Time Payments, Real-Time Risks
The NPP has made everyday banking faster and more convenient, but it has also given fraudsters a new tool. With funds moving instantly, banks have less time to detect suspicious activity, making proactive prevention critical.
3. Sophisticated Criminal Typologies
Fraudsters are no longer lone operators. They work in syndicates, often crossing borders and using advanced tactics such as deepfake impersonations, synthetic identities, and account takeover fraud.
4. Regulatory Scrutiny
AUSTRAC and ASIC have made it clear that banks are expected to have strong fraud prevention frameworks in place. Failing to act not only exposes banks to financial losses but also to regulatory penalties and reputational damage.
Common Types of Banking Fraud in Australia
1. Account Takeover (ATO)
Fraudsters gain control of a customer’s account through phishing, malware, or stolen credentials, then move funds instantly.
2. Authorised Push Payment (APP) Scams
Victims are tricked into authorising payments, often to mule accounts controlled by fraud syndicates.
3. Card Fraud
Both card-present and card-not-present fraud remain prevalent, especially in e-commerce channels.
4. Mule Accounts
Fraudsters use networks of mule accounts to layer and obscure illicit funds. These may be controlled by syndicates or unwitting participants.
5. Insider Fraud
Employees with access to sensitive systems may abuse their position to commit fraud, often in collusion with external actors.
6. Trade and Cross-Border Fraud
International corridors expose Australian banks to risks of trade-based money laundering and fraudulent remittance activity.
Red Flags Banks Must Monitor
- Sudden changes in transaction behaviour, such as rapid high-value transfers.
- Accounts that act as pass-throughs, with funds entering and exiting immediately.
- Multiple accounts linked to the same device or IP address.
- Customers reluctant to provide source-of-funds documentation.
- Transfers to newly created or suspicious beneficiary accounts.
- Unusual login behaviour, such as logins from overseas followed by transactions.
Regulatory Expectations on Fraud Prevention
Australian regulators expect banks to take a proactive, technology-led approach to fraud prevention.
- AUSTRAC: Requires banks to have robust monitoring systems capable of detecting suspicious activity in real time, especially under the AML/CTF Act.
- ASIC: Focuses on consumer protection, particularly in cases of APP scams where customers are tricked into transferring funds.
- Australian Banking Association (ABA): Works with industry participants to develop shared frameworks for fraud detection and scam reimbursement models.
Best Practices for Fraud Prevention in the Banking Industry
1. Real-Time Transaction Monitoring
Banks must monitor every transaction in real time, scoring risk within milliseconds. This is essential for instant payments under the NPP.
2. AI and Machine Learning
AI-driven systems can adapt to new typologies, reduce false positives, and detect anomalies beyond static rules.
3. Behavioural Analytics
Studying how customers interact with banking platforms helps detect account takeover attempts or bot-driven fraud.
4. Strong Customer Authentication (SCA)
Multi-factor authentication, biometrics, and device fingerprinting reduce the likelihood of unauthorised access.
5. Network and Entity Analysis
By linking accounts, devices, and transactions, banks can uncover hidden mule networks.
6. Integrated Case Management
Centralised investigation platforms streamline workflows, enabling faster decisions and regulator-ready reports.
7. Collaboration and Intelligence Sharing
Banks must work together, sharing fraud data and typologies. Collaborative intelligence strengthens the sector’s resilience against syndicates.
Challenges Facing Banks in Fraud Prevention
- Balancing Security and Customer Experience: Overly strict controls may frustrate customers, while lax controls create vulnerabilities.
- Cost of Compliance: Implementing advanced fraud systems is expensive, but far cheaper than paying fines or losing trust.
- Talent Shortages: Skilled fraud investigators and compliance professionals are in short supply in Australia.
- Evolving Criminal Tactics: Fraudsters innovate constantly, forcing banks to remain agile and adaptive.
The Role of Technology in Modern Fraud Prevention
Technology is at the heart of modern fraud prevention strategies. Banks are increasingly turning to advanced solutions that combine AI, machine learning, and federated intelligence.
AI-Powered Detection
Machine learning models reduce false positives and detect new fraud patterns without manual intervention.
Federated Learning
Through networks like the AFC Ecosystem, banks can share anonymised typology data, improving detection across the industry without exposing sensitive customer data.
Agentic AI Assistants
AI copilots can summarise cases, recommend next steps, and assist investigators, saving valuable time.
Simulation Engines
Banks can test fraud scenarios against historical data before deploying detection rules live.
Case Example: Community-Owned Banks Leading the Way
Community-owned banks like Regional Australia Bank and Beyond Bank are adopting advanced fraud and AML solutions to strengthen their defences. By leveraging technology platforms such as Tookitaki’s FinCense, these banks are:
- Detecting mule networks in real time.
- Reducing false positives and investigation workload.
- Staying AUSTRAC-ready with explainable alerts and automated reporting.
- Demonstrating that even mid-sized banks can lead in compliance innovation.
These examples highlight that fraud prevention is not just for Tier-1 banks. Institutions of all sizes can leverage advanced tools to protect their customers and build trust.
Spotlight: Tookitaki’s FinCense for Fraud Prevention
FinCense, Tookitaki’s end-to-end compliance platform, is designed to address the challenges of modern fraud prevention in the banking industry.
- Real-Time Monitoring: Detects fraud instantly across NPP and cross-border transactions.
- Agentic AI: Continuously adapts to new fraud typologies with minimal false positives.
- Federated Intelligence: Accesses real-world scenarios from a global community of compliance experts.
- FinMate AI Copilot: Summarises cases and recommends actions for investigators.
- Regulator-Ready Reporting: AUSTRAC compliance built in, with detailed audit trails.
- Cross-Channel Coverage: Banking transfers, cards, wallets, and crypto monitored from a single platform.
By unifying fraud prevention and AML functions, FinCense reduces operational costs while strengthening resilience against financial crime.
The Future of Fraud Prevention in Australian Banking
Looking ahead, several trends will shape how banks approach fraud prevention:
- Expansion of PayTo: As this NPP feature grows, new fraud typologies will emerge.
- Rise of Deepfake Scams: Voice and video impersonation will challenge traditional controls.
- Shared Fraud Databases: Banks will increasingly collaborate to stop scams mid-flight.
- Cross-Border Intelligence: With Australia connected to Southeast Asia, cross-border monitoring will be vital.
- Sustainability of Compliance: AI and automation will help reduce the cost of compliance while improving outcomes.
Conclusion
Fraud prevention in the banking industry is no longer optional or secondary. In Australia’s real-time, always-on financial environment, it is a strategic imperative. Banks that fail to act face not only financial losses but also reputational damage and regulatory penalties.
The path forward lies in adopting real-time, AI-powered fraud prevention platforms that combine detection, investigation, and compliance in a single ecosystem. Community-owned banks like Regional Australia Bank and Beyond Bank are already proving that with the right technology, any institution can meet the challenges of modern fraud.
Pro tip: Don’t just invest in fraud detection. Invest in fraud prevention solutions that adapt, scale, and build trust with your customers.
Fraud Screening Tools in Australia: Smarter Defences for a Real-Time World
With fraud losses crossing billions, Australian institutions need smarter fraud screening tools to protect both compliance and customer trust.
Fraud is now one of the biggest threats facing Australia’s financial system. Scamwatch data shows Australians lost over AUD 3 billion in 2024 to scams — a figure that continues to rise with digital banking adoption and real-time payment rails like the New Payments Platform (NPP).
Traditional fraud systems, built on static rules, simply can’t keep pace. That’s why financial institutions are turning to fraud screening tools powered by AI and behavioural intelligence to screen transactions, customers, and devices in real time.
But what exactly are fraud screening tools, and how should Australian businesses evaluate them?
What Are Fraud Screening Tools?
Fraud screening tools are systems that automatically review transactions, user activity, and onboarding data to identify and block potentially fraudulent activity. They act as gatekeepers — scoring risk in milliseconds and deciding whether to approve, block, or escalate.
They’re used across industries:
- Banks & Credit Unions: Screening wire transfers, cards, and online banking logins.
- Fintechs: Vetting high volumes of digital onboarding and payment activity.
- Remittance Providers: Screening cross-border corridors for fraud and laundering.
- E-commerce Platforms: Stopping card-not-present fraud and refund abuse.
- Crypto Exchanges: Detecting suspicious wallets and transaction flows.
Why Fraud Screening Tools Are Critical in Australia
1. Instant Payments Raise the Stakes
The NPP enables near-instant transactions. Fraudsters exploit this speed to move funds through mule accounts before detection. Tools must screen transactions in real time, not in batch.
2. Scam Surge in Social Engineering
Romance scams, impersonation fraud, and deepfake-driven attacks are spiking. Many involve “authorised push payments” where victims willingly transfer money. Screening tools must flag unusual transfer behaviour even when the customer approves it.
3. Regulatory Expectations
ASIC and AUSTRAC expect robust fraud and AML screening. Institutions must prove that they have effective, adaptive screening tools — not just compliance checklists.
4. Rising Cost of Compliance
Investigating false positives consumes massive resources. The right screening tools should cut operational costs by reducing unnecessary alerts.
Key Features of Effective Fraud Screening Tools
1. Real-Time Transaction Analysis
- Millisecond-level scoring of payments, logins, and device sessions.
- Monitors velocity (multiple payments in quick succession), device fingerprints, and geo-location mismatches.
2. AI & Machine Learning Models
- Detect anomalies beyond static rule sets.
- Learn continuously from confirmed fraud cases.
- Reduce false positives by distinguishing genuine unusual behaviour from fraud.
3. Behavioural Biometrics
- Analyse how users type, swipe, or navigate apps.
- Identify “bots” and fraudsters impersonating legitimate customers.
4. Multi-Channel Coverage
- Banking transfers, cards, digital wallets, remittances, and crypto — all screened in one platform.
5. Customer & Merchant Screening
- KYC/KYB integration to verify identity documents.
- Sanctions, PEP, and adverse media screening.
6. Explainability & Audit Trails
- “Glass-box” AI ensures every flagged transaction comes with a clear reason code for investigators and regulators.
7. Case Management Integration
- Alerts are fed directly into case management systems, enabling investigators to act quickly.
How Fraud Screening Tools Detect Common Threats
Account Takeover (ATO)
- Detects logins from unusual devices or IPs.
- Flags high-value transfers after suspicious logins.
Mule Networks
- Screens for multiple accounts tied to one device.
- Detects unusual fund flows in and out with little balance retention.
Synthetic Identity Fraud
- Flags inconsistencies across ID documents, IP addresses, and behavioural signals.
Romance & Investment Scams
- Detects repetitive small transfers to new beneficiaries.
- Flags high-value transfers out of pattern with customer history.
Crypto Laundering
- Screens wallet addresses against blacklists and blockchain analytics databases.
Red Flags That Tools Should Catch
- Transactions at unusual hours (e.g., midnight high-value transfers).
- Beneficiary accounts recently opened and linked to multiple small deposits.
- Sudden change in login behaviour (new device, new location).
- Customers reluctant to provide source-of-funds during onboarding.
- Repeated failed logins followed by success and rapid transfers.
Evaluating Fraud Screening Tools: Questions to Ask
- Does the tool support real-time screening across NPP and cross-border payments?
- Is it powered by adaptive AI that learns from new scams?
- Can it reduce false positives significantly?
- Does it integrate with AML systems for holistic compliance?
- Is it AUSTRAC-aligned, with SMR-ready reporting?
- Does the vendor provide local market expertise in Australia?
The Cost of Weak Screening Tools
Without robust fraud screening, institutions face:
- Direct losses from fraud payouts.
- Regulatory fines for inadequate controls.
- Reputational damage — customer trust is hard to regain once lost.
- Operational drain from chasing false positives.
Spotlight: Tookitaki’s FinCense Fraud Screening Tools
FinCense, Tookitaki’s end-to-end compliance platform, is recognised for its advanced fraud screening capabilities.
- Real-Time Monitoring: Screens transactions across banking, payments, and remittances in milliseconds.
- Agentic AI: Detects known and unknown typologies while minimising false positives.
- Federated Intelligence: Draws on real-world fraud scenarios contributed by compliance experts in the AFC Ecosystem.
- FinMate AI Copilot: Provides investigators with instant case summaries and recommended actions.
- Cross-Channel Coverage: Banking, e-wallets, remittance, crypto, and card transactions all covered in one system.
- Regulator-Ready: Transparent AI with complete audit trails to satisfy AUSTRAC.
FinCense doesn’t just screen for fraud — it prevents it in real time, helping Australian institutions build both resilience and trust.
Future Trends in Fraud Screening Tools
- Deepfake & Voice Scam Detection: Identifying manipulated audio and video scams.
- Collaboration Networks: Shared fraud databases across institutions to stop scams mid-flight.
- Agentic AI Assistants: Handling end-to-end fraud investigations with minimal human intervention.
- Cross-Border Intelligence: Coordinated screening across ASEAN corridors, where many scams originate.
Conclusion: Smarter Screening, Stronger Defences
Fraud in Australia is becoming faster, more complex, and more costly. But with the right fraud screening tools, institutions can screen smarter, stop scams in real time, and stay on the right side of AUSTRAC.
Pro tip: Don’t settle for tools that only check boxes. The best fraud screening tools combine real-time detection, adaptive AI, and seamless compliance integration — turning fraud prevention into a competitive advantage.